Here's an illustration of the debt hole Tom was in. To pay back the $30,000 at 15 percent interest, he'd have to make the $800 minimum payment every month for almost four years. He'd pay $11,000 in interest. But at his new rate of 30 percent, it would take nearly ten years and $62,000 in interest.

Tom imitates one such message. "'You have to call us by 11 o'clock p.m. tonight!' and I thought, 'Maybe I do, and maybe I don't.'"

Tom decided to file for bankruptcy. He says he wasn't ashamed to do it. It was a business decision.

"I see the policies of these companies are all business, and the way they treat me is all business, I'm just an account to them. I'm just a number, and well, they're just a company to me…."

Tom Fordham has saved various appeals from credit card companies - some nice, some not so nice - after he fell behind on his payments.Photo by Chris Farrell

Americans like Tom are borrowing less from the local banker or neighborhood merchant who lives down the street and attends school plays. Instead, millions of people have embraced impersonal credit cards issued by giant corporations. Tom is a digital byte, a data point housed in complex algorithms.

Still, he didn't set out for this to happen. "If they hadn't raised me to the default rate, I'd still be paying it. And I'd still be living day to day on credit cards with nothing left at the end of the month, not that I have much left now at the end of the month anyway, but it's more than I would have had."

Tom explains that he would have felt the obligation to keep paying.

"I would have had the sense of an honorable obligation if I wasn't being abused," he says.

The thought of bankruptcy made Tom's wife, Heather, nervous. She was pregnant and wanted to buy a home for their family.

"I had grown up thinking that bankruptcy was an awful thing," says Heather Fordham. "You know, that if you file bankruptcy, your life was over."

Heather thought filing bankruptcy would mean never buying a home or a car. Tom persuaded her it would be better to get off the debt treadmill or they'd never get ahead. Finally, they agreed. He'd file bankruptcy on his own in early October. Tom didn't tell his parents. He says he didn't want them to offer to help.

Four months later, Tom's part-time job at a local college has turned into a full-time gig with benefits. When I arrive, he shows me the day's mail.

"I got official notification from my attorney today," Tom reads. "'Blah, blah, blah. Here's the notice of discharge,' or whatever. I already figured that out. But of course the same day I get that, I get a Capitol One auto-finance, the first credit card-related anything I've gotten since filing."

Fordham laughs. "Wow. Congratulations. I've been pre-approved for up to $25,000. Financing by Capitol One. One of the people included in the bankruptcy."

Contrary to popular belief, people who file bankruptcy do not become credit lepers. Far from it. They're flooded with loan offers, albeit at higher than normal interest rates. One attraction for creditors? You can't file for bankruptcy again for another eight years.

Tom says to him it feels like a fresh start.

"Actually, it's strange because even without all the credit card bills, I still don't really have much left over. It makes me wonder how I did it for so long."

Maybe the reason money is still tight is the other big change in Tom's life: a baby.

Heather Fordham brings baby Alexandra home from daycare and settles her on her lap with a bottle.

"I'm glad it's over with so we can start the next phase of our life and just move on and say 'OK, we have a better chance now without lugging around all that extra debt,'" says Heather Fordham.

She says she hesitated to tell her parents.

"My mother knows," says Heather. "I didn't say anything to my father and his wife only because I didn't want them to worry that, you know, that we weren't making ends meet, when that wasn't the case, actually. So no, just my mom, just as a passing conversation piece, nothing major. Did you ever tell your parents?" she asks Tom.

"Not yet," he admits.

"I don't know why. You're silly," she teases.

"I planned to tell them when they were coming down last time, but they were kind of here for the baby, and it seemed like a spoiler," Fordham explains.

She laughs. "Oh by the way, we just had a baby, but I'm filing bankruptcy."

Tom and Heather say they hope to be able to buy a home in the next few years. Bankruptcy was probably a good move for them.

But if bankruptcy is such a good deal, why don't more people do it? That was the question economist Michelle White of the University of California San Diego wondered.

Several years ago she calculated that at least 15 percent of households would have benefited from filing for bankruptcy compared to the 1 percent that actually filed.

Stigma may have eroded, but most Americans will work hard to stay out of bankruptcy court.